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Loan No. 03-0220389
CAPITAL IMPROVEMENT AND TENANT FITOUT ESCROW AGREEMENT
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This Capital Improvement and Tenant Fit-Out Escrow Agreement
(the
"Agreement") is made as of March 17, 2004
between Wells Fargo Bank N.A. f/k/a
Norwest Bank Minnesota, National
Association, as Trustee for the registered
holders of NationsLink Funding Corporation,
Commercial Mortgage Pass-Through
Certificates, Series 1998-2, in its
capacities as lender and escrow agent
("Lender"), and Cedar Townfair, LLC, a
Delaware limited liability company
("Borrower").
RECITALS
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A. This
Agreement is being executed in connection with Lender's consent
to
the assumption by Borrower of a mortgage loan to Townfair
Center
Associates, a Pennsylvania general partnership ("Seller") in
the
original
principal amount of Ten Million Seven Hundred Thousand and
No/100 Dollars ($10,700,000.00) (the "Loan"), and the Loan
assumption
is incident to Borrower's purchase of the real property commonly
known
as Townfair Center (Phase I & II), 475 South Ben Franklin Road,
White
Township, Pennsylvania, being more particularly described on
Exhibit A
attached hereto.
B. The
Loan is evidenced by a Promissory Note (the "Note"), dated
February
13, 1998, made by Seller and is secured by, among other things,
an
Open-End Mortgage, Assignment of Leases and Rents and Security
Agreement (the "Security Instrument"), dated as of February 13,
1998,
encumbering that certain real property situated in the County
of
Indiana, Commonwealth of Pennsylvania ("State"), as more
particularly
described on Exhibit A attached hereto and incorporated herein by
this
reference, together with the buildings, structures and other
improvements now or hereafter located thereon (said real
property,
buildings, structures and other improvements being hereinafter
collectively referred to as the "Property") and by other documents
and
instruments, and the Lender's consent to the transfer of the
Property
to Borrower is being made pursuant to a Consent and Assumption
Agreement with Limited Release dated of even date herewith (the
"Assumption Agreement") (the Note, Security Instrument,
Assumption
Agreement and such other documents, agreements and instruments, as
the
same may from time to time be amended, modified, extended,
severed,
split, divided, spread, restated, substituted, supplemented,
consolidated, renewed or replaced, being collectively referred
to
herein as the "Loan Documents");
C. As a
condition to Lender giving its consent to the assumption of the
Loan by Borrower, the transfer of the Property to Borrower and
the
construction of a new 5,000 square foot building on the
Property,
Lender has required that Borrower deposit the Escrow Funds
(hereinafter
defined) with Lender pursuant and subject to the terms of this
Agreement.
NOW, THEREFORE, to induce Lender to consent to the transfer of
the
Property to Borrower, consent to Borrower's
assumption of the Loan and consent
to the construction of a new 5,000 square
foot building on the Property and in
consideration of the premises and the due
performance of the commitments and
agreements hereinafter set forth, and other
valuable consideration, the receipt
and sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
1.
Escrow. Borrower shall establish and maintain an escrow of funds
with
Lender pursuant to the terms of this Agreement for the payment
of
future customary and reasonable bona fide costs and expenses
incurred
by Borrower in connection with the (i) construction of a 5,000
square
foot building on the Property ("New Building") and (ii) completion
of
tenant improvements required to be paid by Borrower in connection
with
a lease ("New Lease") for approximately 3,000 square feet of space
in
the New Building (the "Leasing Matters").
Midland 299
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2.
Deposit of Escrow Funds. All amounts held by Lender at any time
in
escrow pursuant to this Agreement are the "Escrow Funds". On the
date
hereof, Borrower shall make an initial deposit of $393,310.00
with
Lender, to be held in escrow by Lender according to the terms of
this
Agreement. The Escrow Funds shall be disbursed or applied only
as
specified in this Agreement.
3.
Escrow Account. Lender agrees to hold all Escrow Funds in an
Eligible
Account (hereinafter defined) selected by Lender from time to time
in
the exercise of its sole discretion (the "Escrow Account"). No
earnings
or interest on the Escrow Funds shall be payable to Borrower.
The
Escrow Funds shall not constitute a trust fund and may be
commingled
with other monies held by Lender. The Escrow Account shall be held
in
the name of Lender and shall be within its sole and exclusive
control,
and all funds deposited in the Escrow Account shall be for the
account
of Lender. Except as provided herein, Borrower shall have no right
to
or interest in the Escrow Funds or Escrow Account and shall have
no
authority to withdraw Escrow Funds from the Escrow Account. An
"Eligible Account" shall mean either (a) an account maintained with
a
depository institution or trust company, the long term unsecured
debt
obligations of which are rated in one of the three highest
rating
categories by any Rating Agency (hereinafter defined) acceptable
to
Lender at the time of any deposit therein or (b) a trust
account
maintained with a federally or state-chartered depository
institution
or trust company acting in its fiduciary capacity, subject to
regulations regarding fiduciary funds on deposit similar to 12
C.F.R.
Section
9.10(b). The term "Rating Agency" shall mean a nationally
recognized credit rating agency (including, without limitation,
Standard & Poor's Rating Group, Fitch Investors Service, L.P.,
Moody's
Investors Service, Inc. or Duff and Phelps Credit Rating Co., and
their
respective successors and assigns).
4.
Permitted Investments. Lender may direct the depository
institution
maintaining the Escrow Account to invest the Escrow Funds in one
or
more of
the following obligations or securities (each a "Permitted
Investment") having, at the time of purchase, the required ratings,
if
any, provided for below:
a. Direct obligations of, or guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided that such obligations are backed
by
the full faith and credit of the United States of America;
b. Direct obligations of, or guaranteed as to timely payment of
principal and interest by, FHLMC, FNMA or the Federal Farm
Credit
System;
c. Demand and time deposits in or certificates of deposit of,
or
bankers' acceptances issued by, any bank or trust company,
savings
and loan association or savings bank, provided that the
short-term
unsecured debt obligations of such depository institution or
trust
company must have the highest rating available for such
securities
by two or more Rating Agencies acceptable to Lender;
d. Commercial or finance company paper that is rated by two or
more
Rating Agencies acceptable to Lender in their highest
short-term
unsecured
rating category at the time of such investment and is
issued by a corporation the outstanding senior long-term debt
obligations of which are then rated by two or more Rating
Agencies
in one of their two highest long-term unsecured rating
categories;
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e. Repurchase obligations with respect to any security described
in
clause (a) or (b) above entered into with a bank or trust
company,
savings and loan association or savings bank, provided that the
short-term unsecured debt obligations of such depository
institution
or trust company must have the highest rating available for
such
securities by two or more Rating Agencies acceptable to Lender;
f. Units of taxable money market funds which funds are
regulated
investment companies, seek to maintain a constant net asset
value
per share and invest solely in obligations backed by the full
faith
and credit of the United States and repurchase agreements using
full
faith and credit issues as collateral and are rated in the
highest
rating category available by a Rating Agency acceptable to
Lender.
5.
Pledge and Security Interest. As additional security for the
payment
and performance by Borrower of all duties, responsibilities and
obligations hereunder and under the Loan Documents, Borrower
hereby
unconditionally and irrevocably assigns, conveys, pledges,
mortgages,
transfers, delivers, deposits, sets over and confirms unto Lender,
and
hereby grants to Lender a security interest and a valid and
perfected
first lien in (a) the Escrow Funds, (b) the Escrow Account, (c)
all
insurance of the Escrow Account, (d) all accounts, contract rights
and
general intangibles or other rights and interests pertaining
thereto,
(e) all sums now or hereafter therein or represented thereby, (f)
all
replacements, substitutions or proceeds thereof, (g) all
instruments
and documents now or hereafter evidencing the Escrow Funds or
the
Escrow Account, (h) all powers, options, rights, privileges and
immunities pertaining to the Escrow Funds or the Escrow Account
(including the right to make withdrawal therefrom), and (i) all
proceeds of the foregoing. Lender may deliver notice of its
interest in
the Escrow Funds and Escrow Account at any time to the
financial
institution wherein the Escrow Account has been established, and
Lender
shall have possession of all passbooks or other evidences of
such
Escrow Account. Borrower hereby assumes all risk of loss with
respect
to amounts on deposit in the Escrow Account, except to the
extent
caused by the gross negligence or intentional misconduct of
Lender.
Borrower hereby agrees that the advancement of Escrow Funds from
the
Escrow Account as set forth herein is at Borrower's direction and
is
not the exercise by Lender of any right of set-off or other remedy
upon
an Event of Default (as defined in the Loan Documents). Borrower
hereby
waives all right to withdraw Escrow Funds from the Escrow
Account,
except upon full satisfaction of all amounts then due and payable
under
the Loan. Borrower agrees to execute and deliver on demand any and
all
documentation requested by Lender to further evidence or perfect
such
assignment, including, without limitation, Uniform Commercial
Code
financing statements. Borrower hereby irrevocably constitutes
and
appoints Lender as its attorney-in-fact, with full power of
substitution and transfer, to execute and deliver any and all
such
documentation. The power of attorney hereby granted shall be
irrevocable and coupled with an interest. This Agreement shall
constitute a Security Agreement under the Uniform Commercial Code
as
enacted in the Commonwealth of Pennsylvania and upon an Event
of
Default, Lender may exercise any or all of the remedies available
at
law or in equity including, without limitation, the remedies
specified
in this Agreement and the remedies available to a secured party
following default as specified in such Uniform Commercial Code.
Lender
and Borrower hereby acknowledge and agree that Lender has a valid
and
perfected first priority lien on, and security interest in, any
Escrow
Funds now or hereafter held in
